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Japan is facing an excessive government deficit that could lead to financial calamity in the coming years.
“Japan’s public debt is set to exceed twice the size of the economy this year and reach 210 percent of gross domestic product in 2012, the highest among countries tracked by the Organization for Economic Cooperation and Development,” Bloomberg reported.
Borrowing will surpass tax revenue for the third year in a row, according to Reuters. “Japan’s public debt is already about twice the size of its $5 trillion economy.”
Economics minister Kaoru Yosano has proposed raising the sales tax to manage the nation’s struggling welfare program.
Prime Minister Naoto Kan also expressed concerns about the nation’s economic situation.
“Worries about Japan’s fiscal future have been fuelled over the past year by the sovereign debt crises suffered by eurozone countries, with Mr Kan warning last June that Japan could end up like Greece unless it tackled its rising debt,” Financial Times reported.